Corporate venture capital deal activity in Q3’13 jumped to the highest level since the start of 2011, growing 18% from the same quarter last year and 46% from the same quarter two years ago. On the funding front, corporate venture dollars hit a five-quarter higher as Q3’13 saw corporate VCs participate in 140 deals representing total funding of $2.1 billion. In fact, the average CVC deal size rose yet again in Q3’13 to hit $17.0M, marking the widest gap between deals in which CVCs participate and average VC deal size in five quarters. With the VC asset class shrinking, the large balance sheets of corporate investors are becoming increasingly important in the VC ecosystem with Q3 data highlighting that CVCs participated in deals that represented just under 30% of overall VC funding.
Number of active CVC investors stays steady
The number of CVCs actively investing remained consistent with Q2’13 levels. But compared to Q4’11, the number of CVCs in the market has jumped 29%.
CVC funding concentrated at mid- and late-stages
Despite early stage (Seed, Series A) CVC deal share increasing from Q2’13, CVC funding share at the early stage matched a five-quarter low at a combined 9%. A whopping 81% of CVC funding went to mid and later stage (Series C+) funding rounds.
It must be the money – CVCs write even larger checks
The average deal size with CVC participation rose yet again in Q3’13 to hit $17.0M on average. The deal size gap versus overall VC averages in Q3’13 was the widest in five quarters, highlighting the concentration of CVC funding at the mid and later stages and strong balance sheets of corporate venture investors.
Corporate VCs pull back from healthcare
CVC investment in healthcare hit a five quarter low in Q3’13. Compared to Q2’13, deals and funding in the quarter declined by 41% and 27% respectively. Deals and funding were also down on a YoY basis.
Mega-deals prompt explosion in CVC funding to the mobile sector
The top 3 mobile & telecom CVC deals took 70% of Q3 mobile CVC funding, which more than doubled Q2’13’s funding amount and marked the highest quarterly total since the start of 2012. On a year-over-year and sequential basis, mobile CVC deals increased 68% and 39%, respectively.
CVCs are not the saving grace of clean tech?
Clean Tech saw under 10 deals with participation from Corporate VCs for the third quarter in a row. Funding levels were anemic in Q3’13, dropping below $100M for the second time in five quarters.
Google Ventures leads most active CVC investors in Q3; Healthcare CVCs less active
Google Ventures tops the list of most active CVC investors in U.S.-based companies in Q3’13, followed by Intel Capital, Samsung Ventures and SAP Ventures. Only two healthcare CVCs, Johnson & Johnson Development Corp. and GlaxoSmithKline’s SR One were among the top 10 most active.
California CVC funding tops the $1B mark
For the first time since Q2’12, California saw CVC funding cross the $1B mark behind a surge in mobile funding.
NY beats Massachusetts for CVC deals
New York’s share of corporate venture deals topped Mass. for the first time in five quarters. But despite more deals, NY’s share of CVC funding fell to just 7% – a five-qtr low.